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Sophia Wong

A renewed price war has broken out among major developers trying to spark market interest with aggressive marketing campaigns that resemble the SAR's pre-bust housing market.

Wharf (Holdings) is cutting prices for the first batch of public sale units at its Kowloon Station, Sorrento phase two project, after Queen's Terrace in Sheung Wan was yesterday priced at more than 10 per cent below prevailing secondary market prices.

The two core urban district projects are seen as setting new benchmarks for a property market which has seen a 65 per cent decline in prices since 1998.

Cheung Kong (Holdings) executive director Justin Chiu Kwok-hung said yesterday more than 2,000 prospective buyers had registered interest in Queen's Terrace after the developers announced price reductions for the first batch of public sale units.

Since the project comprises a total of 1,148 flats, he described the response as satisfactory.

Under a lottery system that allows potential buyers to post up to 10 expressions of interest on payment of a HK$60,000 deposit, some buyers had registered the maximum number, he said.

Queen's Terrace is an Urban Renewal Authority joint venture developed by Cheung Kong and New World Development. The company is expected to offer units under an 'internal sale' programme pending approval.

Sandia Lau Ying-lam, Centaline Property Agency's senior sales director, said developers were keen to offload units to tap improved market sentiment after the government unveiled a stimulus package two weeks ago aimed at reducing supply and boosting prices.

Wharf assistant director Ricky Wong Kwong-yiu said its public sale for 10 units measuring 1,440 sq ft to 1,805 sq ft at Sorrento phase two, priced at HK$3,848 per sq ft for cash buyers, would be held next Saturday.

The price is 2 per cent lower than its first batch of units released last Friday at HK$3,950 per sq ft and is 3 per cent below the first batch of public sale units at phase one sold last November, according to Mr Wong.

The cheapest unit on offer costs HK$4.18 million.

'The first batch of units are priced at an attractive level to lure buyers. Additional units could be priced 5 to 10 per cent higher,' he said.

He said more than 200 units at Sorrento phase two had been sold through internal sale over the past week, generating HK$1.4 billion. The average price was about HK$5,000 per sq ft.

The firm planned to release an additional 100 units for sale, he said.

During the past two months, Wharf had sold more than 1,300 units at Bellagio in Sham Tseng and reaped HK$3 billion, he said. He expected the additional 100 units at Sorrento phase two could contribute an additional HK$6 billion.

Meanwhile, Cheung Kong is releasing an additional 35 units at Banyan Garden in Cheung Sha Wan for HK$2,700 per sq ft with terms offering staggered payment. However, Mr Chiu denied the units were discounted to undercut rival projects. 'Buyers choosing staggered payment will pay a 6 per cent higher price for their flats and higher interest charges,' he said.

An escalation of the price war is expected in the Tung Chung area with two new projects scheduled to be released. Cheung Kong's Caribbean Coast development competes directly with HKR International's planned sale of 2,022 units at Coastal Skyline early next month.

A spokesman for Cheung Kong said the soft launch of Caribbean Coast phase two in Tung Chung would be initiated next week although the official consent had not been received.

Mr Chiu said that although the phase two sale had not yet been scheduled, it made sense to proceed once developers were ready to begin developing new projects. 'The good market response for Queen's Terrace has convinced there is a strong demand,' he said.

Graphic: prop30gbz



Developers spark fresh price war